According to a top regulator reported by the state-run Securities Times on Saturday, ongoing control has greatly reduced the assets and risks of China’s “shadow” banking sector.
According to Liang Tao, vice chairman of the China Banking and Insurance Regulatory Commission, the sector has decreased from its historical high by more than 29 trillion yuan ($4.3 trillion) as of the end of June.
He omitted to say when the climax occurred.
But because certain goods have intricate structures and significant levels of leverage, Liang issued a strong warning about hidden risks, according to the newspaper.
As certain institutions may exploit incorrect financial technologies to establish new types of shadow banking, Liang was reported as saying that people should be aware of the hazards of a shadow banking resurgence.
China has cracked down on shadow banking in recent years due to worries about the hidden risks in the industry’s large volume of complex and possibly hazardous loans. However, as a faltering economy puts strain on companies and people, authorities worry that illegal and shadow lending may increase.
